Global Market: European shares subdued as investors assess earnings, geopolitical risks ahead of US inflation data

European shares were largely subdued on Wednesday as investors weighed a mixed batch of corporate earnings and renewed geopolitical tensions ahead of crucial U.S. inflation data, Reuters reported.

The pan-European STOXX 600 was little changed at 661.26 points as of 0715 GMT, remaining close to recent record highs. Investors were cautious as rising energy prices and uncertainty over the Iran conflict added to concerns about inflation and global trade.

Brent crude futures rose 0.8% to $89.57 a barrel after fresh attacks on shipping in the Middle East and fading expectations of a near-term resolution to the conflict.


The United States and Yemen's Iran-aligned Houthis reported separate attacks on shipping, while Tehran said the Strait of Hormuz would remain closed unless Washington accepted Iran's conditions. The six-month-old conflict showed little sign of ending despite repeated claims by U.S. President Donald Trump that an agreement was close.

The prolonged conflict has kept markets volatile as investors assess the potential for wider disruptions to energy supplies and global trade. Additional geopolitical concerns emerged after North Korea fired another ballistic missile into the ocean, while Taiwan protested planned Chinese naval drills off its eastern coast.

Energy stocks lead gains

Europe's energy sector was among the strongest performers, rising 0.7% as higher crude prices supported oil and gas companies. The automobiles and parts sector was the biggest decliner on the STOXX 600, falling 0.8%.

Investors were also focused on U.S. consumer price data due later on Wednesday. While the July CPI figures are unlikely to capture the latest surge in energy costs, the report could still influence expectations for the Federal Reserve's September policy meeting.

Markets are currently pricing roughly an even chance of a rate hike next month, according to CME's FedWatch tool.

Earnings drive individual stocks

Corporate earnings provided another source of volatility across European markets.

TKMS shares jumped 9.2% after the warship manufacturer raised its outlook for the second time in six months, boosting investor confidence in its growth prospects.

TUI, Europe's largest travel company, fell 2.8% after its third-quarter operating profit came in below expectations. The company was affected by weaker bookings and higher jet fuel costs linked to tensions in the Middle East.

K+S shares gained 2.2% after the German potash and salt producer raised its annual outlook for the second time this year.

According to Reuters, investors remained focused on company-specific earnings developments while also monitoring oil prices, geopolitical risks and the U.S. inflation report for clues about the broader direction of European markets.

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